Instructions Labels and Amount Descriptions Differential Analysis Final Question Instructions Lexigraphic Printing Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows $88,825 Old Machine Cost of machine, 10-year life Annual depreciation (straight-line) Annual manufacturing costs, excluding depreciation Annual non-manufacturing operating expenses Annual revenue Current estimated selling price of machine 8,700 23,710 5,955 74,035 29,835 New Machine New Machine $119,840 Purchase price of machine, six-year life Annual depreciation (straight-line) 20,095 Estimated annual manufacturing costs, excluding depreciation 6,920 Annual non-manufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine Labels and Amount Descriptions Differential Analysis April 30 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effect on Income Alternative 2) 3 (Label) 5 (Label) Labels and Amount Descriptions Labels Cash flows from investing activities Costs Revenues Amount Descriptions Annual manufacturing costs (6 yrs.) Gain on sale of investments Loss on sale of investments Purchase price Proceeds from sale of old machine Income (loss)